How to Build Your Credit Back Up From Chapter 7

To build credit back up after filing for chapter seven, consider getting a prepaid credit card, getting someone to co-sign on a loan or getting a small government-sponsored loan, making timely payments to gain credibility. Build up better credit after filing for bankruptcy with information from a financial manager and currency trader in this free video on finance.

Comments

Video Transcript

I'm Roger Groh. We're here today to talk about how you rebuild your credit once you have filed from chapter 7. Well there are really a couple of ways to do it. Number one, you can always get a prepaid credit card where you're obligated to make payments and if you make them on time or don't, that history will then show on your credit report moving forward. If you do make them on time regularly, that's a positive for you and ultimately you will end up being and easier way for you to get credit. And because you've prepaid the credit card, the credit company doesn't have any risk. So it's a logical way to do it. Number two is get somebody to cosign a loan for you. It can be very small, it can be a hundred dollars, it can be two hundred dollars for just where you have some regular payments that you have to make. And again, the key here is to make those payments on time because they'll show up in your credit history and on time payments become a big part of your credit score moving forward. Other routes might be there are other government sponsored loans that you may be able to get even though you have filed for chapter 7 and once you get those loans, as long as you pay them back on time and do what you're supposed to do in terms of money, that will show up as a positive event on your credit history. Once you file for chapter 7, it's 8 years before you can file for chapter 7 again. So ironically once you have files for chapter 7, the banks may want to loan to you again because they will then be able to attach other assets that you have or your income whereas once you've filed, they can't. So you're more attractive after you've filed rather than beforehand. And there is an 8 year gap between when you can file one time and it's discharged and then between when you can file again. That's how you repair the past after you have filed for chapter 7.